Systrome eyes a Vizhinjam Port boost

The managing director of Systrome Technologies, Anil Raj, admits that love for his birthplace was a factor in establishing a base in Kerala. But he says the decision to locate the 100 crore rupees electronics manufacturing facility in Trivandrum was based on two much more important economic reasons: logistics and skilled manpower.

He says the transshipment port in Vizhinjam will have a far-reaching effect on the state's economy, arriving at an opportune moment when India is gaining traction as a manufacturing destination, with countries seeking alternatives to China.

“India is where China was maybe 20 years ago. But our speed of growth will be much faster due to market maturity. Sometimes latecomers into a sector get the advantage of new technology. So Indian companies may not go through all that they went through because the system has matured. What they achieved in 10 years, maybe we will achieve in five years,” says Anil Raj.

“The problem in a large country like India is logistics. Mumbai port is two days away from the international sea route. The geographical location of Trivandrum is crucial as it is just 10 nautical miles or 19 kilometres from the international sea route. So the advantage of Trivandrum is obvious.”

If such statements came from a PR person appointed by Vizhinjam Port authorities, one would have added the usual caveat of taking a generous dose of salt to go with it. But the trail-blazing path that Anil Raj has set shows that he has the unusual knack of being ahead of the curve when the rest of us aren't even aware of the curve.

Long before computer coding became a glamorous profession, he jumped into it. That too after completing his commerce degree from Trivandrum MG College in 1984. Doing a course at the National Institute of Computer Technology in Quilon was the beginning, and then he embarked on a journey of self-learning about coding.

That was when most of his contemporaries with BCom degrees were beavering away at the offices of chartered accountants or looking for bank jobs. Computers in those days were 8-bit and ran on floppy discs.

Soon, he landed a job in a Bombay-based firm called Zuhyde Intelligence, which was making digital sound solutions. Using that, Anil Raj made games for Apple, even before the firm founded by Steve Jobs had come out with its first Macintosh computer.

His next stop was New Delhi, where he joined MultiTech in 1994, a firm that was making telecom equipment like dialup modems. There he began a long innings that lasted eight years and established him as a tech expert in networking technology.

By the time India started entering the internet age in a big way with the establishment of Bharat Sanchar Nigam Limited (BSNL) in 2000, Anil Raj had become a sought-after figure for companies involved in routing, switching, and voice over IP.

He became a consultant for the Israeli firm Audiocodes, and his travels to different parts of the world started giving him a sense of the opportunities in the sector that was just beginning to open up. In 2003, he, along with a former colleague from MultiTech, Harihara Subramony, started a company called TechRoutes in Gurugaon, long before it became a tech hub.

When the Indian telecom networking explosion started by the mid-2000s, TechRoutes was ready to ride the wave.

As networking technology started shifting to software, in 2016 Anil Raj established Systrome Networks with his wife Shaheeja Nair as a cofounder. "She is the main pillar of the firm and looks after all the management side of it," he says.

The tech world continued to change, but Anil Raj’s journey followed the same pattern. In 2023, he, along with some of the sharpest brains in the Indian chip sector, established a startup to design and develop microchips as the global demand for wafers reached new heights.

It is this instinct to see what is ahead that has brought him back to his hometown. Even as the Vizhinjam port welcomed its first bulk carrier on 11 July 2024, Systrome was ready with electronics manufacturing facility in Trivandrum to tap the advantage of the new logistics link.

Demand for electronic components will rise exponentially as electronics enter every aspect of modern life, from household gadgets to cars. At the same time, resistance to imports from China is rising in many countries, especially in Europe.

Coupled with this is the huge domestic market in India. The country has around 360 million households, and the broadband connection they get is mostly through mobile phone networks. Houses connected otherwise to broadband number only 36 million. So that is a huge market waiting to be tapped.

“India still imports 1 lakh 90,000 crore rupees worth of electronic components every year. We are importing 39,000 crore worth of material from China alone.”

He is not overly concerned about the fact that India still relies on component imports but sees another opportunity. The raw materials we need mostly come from the East Asian region, and our markets are here in India and to the west, from Africa to Europe.

“So it makes perfect sense to make logistically connected Kerala a base, as it is strategically located.”

The lack of a well-oiled supply chain in India also does not bother him too much. US companies used to ship components to countries like South Korea to manufacture their products there. Later, it shifted to China. But that helped both countries.

Firms like Samsung, LG, and Hyundai developed from that ecosystem in South Korea, while it led to the birth of Chinese global giants like Huawei, ZTO, and BYD.

Production facilities being located here will create the ecosystem that will spur local growth. It will not happen overnight, but the encouragement to manufacture in India will bring us benefits, says Anil Raj.

Once production facilities sprout up, someone may develop a new design and have it manufactured here. There will be no need to go abroad to make it as we do now. That will gradually build up. It is the beginning of a big change.

“The talent in India has always been evident. Take the old Adobe products that were used globally. If you scroll down to the names of the people who worked on them, there were always a lot of Indian names.”

He says Kerala has an advantage as skilled manpower is cheaper in the state than in places like Bangalore or Mumbai, where the cost of living is high. Plus, it has less pollution and is blessed with natural beauty.

The government is doing its bit to attract industries, but the local private sector has to step up its game. They need to increase efficiency and quality and get rid of the lack of confidence and trust. Time management of local workers and the high cost of manual labour compared to cities like Mumbai or Chennai are also impediments.

“Still, strategically located Trivandrum has a lot of positives to attract industry people. The new port and increased air connectivity will add to it. The availability of a skilled workforce is the biggest advantage. In fact, the new venture we started, Aheesa Innovations, is creating new chips by building on the core work done by engineers in Trivandrum CDAC.”

Aheesa's partners include Sreedharan Mani, former CEO of American Megatrends India; Sugha Ghosh, a veteran in chip designing who has done work for Indian defence and holds over 40 patents; and Swaroop Adusumilli from Microchip Technology, who holds 33 patents.

“It is not a startup by youngsters but a venture floated by mature people. But the enthusiasm we have rivals the youth,” says Anil Raj with a laugh. The Chennai-based startup has been chosen under the Design Linked Incentive Scheme of the Government of India.

All four ventures that Anil Raj founded – Techroute, Systrome Networks, Systrome Technology, and Aheesa – are interconnected, but all of them are separate verticals catering to their own customers in the electronics sector.

“What we are looking to do is initially capture the mass market for chips, create market acceptance, and develop a unique selling point to market 'Made in India' chips globally,” says Anil Raj.

He is confident that Indian chips can compete globally as innovations will make them cheaper. His company is now looking to create a chip for the networking sector. If new chips use less power and reduce the need for additional components by integrating them into the chips, demand will follow.

He says he wants to use the technology his firms are developing to solve problems that societies face, such as water pollution.

“When I was growing up, we used to travel to my dad’s village in Chengannur. A bath in the Pamba River was a must for him, and it rejuvenated him. But now the river is so polluted that it is impossible to swim in it.”

“But what I found out was that during the lockdown period of Covid, the river recovered and the water became clean. So it is a repairable condition yet. Maybe technology that our firms are making can help in that,” says the entrepreneur whose business empire spans different tech sectors, but whose heart is firmly rooted in Kerala.

[Updated on July 24: The Systrome facility in Trivandrum manufactures electronic components, not chips as previously stated. We deeply regret the error.]

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